Southern Becomes Diageo’s National Broker Across Control StatesJune 17, 2011
As a result of an agreement announced today, Southern Wine & Spirits has picked up a sizeable new slice of control state brokerage business from Diageo NA, and will now handle Diageo’s spirits brands across all 18 U.S. control states. The deal will also see Southern represent Diageo’s Chateau & Estate wine brands across five control states: Mississippi, New Hampshire, Pennsylvania, Utah and Wyoming.
Southern previously handled Diageo’s spirits portfolio in 11 control states, in addition to six open states. With the new agreement, Diageo and Southern will be aligned in Pennsylvania (where Diageo previously self-represented its portfolio) and Michigan, two of the top 10 U.S. spirits and wine markets.
The new agreement doesn’t include the two control counties in Maryland nor low-proof spirits in Idaho, Michigan or Ohio, nor will SWS be considered Diageo’s “authorized distributing agent” in Michigan (where National Wine & Spirits currently serves in that role for over half the spirits market, including some Diageo brands). Asked what services SWS will be providing in Michigan—the second-largest control state for spirits—an SWS spokesperson declined to elaborate, but said Southern “is in the process of applying for a license to operate in Michigan and Iowa,” the two states covered in the deal where SWS doesn’t currently have a presence.
The expanded alignment between the biggest players in the U.S. supplier and distributor tiers, respectively, will go into effect either July 1st or August 1st depending on the state. Diageo said the arrangement will “provide for a number of key changes, including enhancements to the teams representing Diageo brands as well as increased focus on multicultural and on-premise—two areas that are designated as key priorities for future growth.”
|Diageo-Top 10 Spirit Brands in Control States
(thousands of actual cases)
|3||Crown Royal||Canadian Whisky||859||873||1.7%|
|5||Seagram’s 7 Crown||Blended Whiskey||599||585||-2.3%|
|Total Top 10||7,066||7,134||1.0%|
|* Less than 0.05%.
2Addition of columns may not agree due to rounding.
3Based on unrounded data.
Source: NABCA/Impact Databank